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Global cues subdue equity indices to 5-week lows; metals, banks slump

A broker (L) watches a TV news channel as another monitors share prices at a brokerage firm in Mumbai August 9, 2011. REUTERS/Danish Siddiqui/Files

 

Mumbai, August 11 (IANS) The key Indian equity indices — the BSE Sensex and the NSE Nifty50 — plunged for the fifth consecutive session on Friday, settling at their five-week lows.

 

According to market observers, the key indices closed the day’s trade with losses of more than 1 per cent each as investors’ sentiments were subdued by negative global cues and intense selling activity in metal, automobile and banking stocks.

 

Besides, heavy selling in individual index heavyweights like State Bank of India (SBI), Reliance Industries (RIL), Mahindra & Mahindra (M&M) and Larsen & Toubro (LT), among others, and persistent outflow of foreign funds hampered investors’ risk-taking appetite.

 

On a closing basis, the Nifty50 fell below the psychologically important 9,800-level to close the day’s trade at 9,710.80 points — down 109.45 points, or 1.11 per cent.

 

At one point, the Nifty50 of the National Stock Exchange (NSE) fell to trade even below the 9,700-mark, which was breached for the first time on June 6.

 

The 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 31,355.92 points, closed at 31,213.59 points — down 317.74 points, or 1.01 per cent, from its previous close at 31,531.33 points.

 

The Sensex touched a high of 31,379.20 points and a low of 31,128.02 points during the intra-day trade.

 

The BSE market breadth was bearish — with 1,635 declines and 911 advances.

 

The broader market indices outperformed the benchmark indices. The S&P BSE mid-cap index fell by 0.20 per cent and the small-cap index by 0.23 per cent.

 

“Markets corrected further on Friday as selling intensified in the afternoon session. It was the fifth consecutive session of losses,” Deepak Jasani, Head of Retail Research, HDFC Securities, told IANS.

 

“The markets settled at their five-week lows as PSU banks and metal stocks came under pressure, even as the escalating tensions between the United States and North Korea continued to drive investors away from risk assets.”

 

Jasani added that global sentiment, too, was largely weak with foreign stocks tumbling for a fourth day and were on course for their worst week since November, as the escalating war of words over North Korea drove investors on Friday toward the Yen, the Swiss Franc and gold.

 

On the currency front, the rupee weakened by five paise to close at 64.13-14 to a US dollar from its previous close at 64.08-09.

 

In investments, provisional data with the exchanges showed that foreign institutional investors (FIIs) sold scrips worth Rs 1,943.86 crore, while domestic institutional investors (DIIs) purchased stocks worth Rs 2,016.84 crore.

 

“The Nifty PSU Bank index dipped nearly 5 per cent after Oriental Bank, Union Bank of India and SBI fell 5 per cent each after disappointing earnings for the June quarter,” said Dhruv Desai, Director and Chief Operating Officer of Tradebulls.

 

“Meanwhile, volatility index — India VIX — hit its highest in six months, suggesting market participants expect major volatility on the Nifty over the next 30 days,” added Desai.

 

All the sub-indices on the BSE ended in the red, barring the consumer durables index, which rose by 57 points, and the healthcare index by 28.58 points.

 

The S&P BSE metal index tumbled by 462.55 points, followed by the automobile index by 356.27 points, and the banking index by 241.62 points.

 

Major Sensex gainers on Friday were: Dr. Reddy’s Lab, up 3.20 per cent at Rs 2,011.35; Tata Motors (DVR), up 1.50 per cent at Rs 223.20; Lupin, up 0.71 per cent at Rs 942.25; Wipro, up 0.66 per cent at Rs 289.90; and Axis Bank, up 0.63 per cent at Rs 489.95.

 

Major Sensex losers were: SBI, down 5.36 per cent at Rs 280.65; M&M, down 3.10 per cent at Rs 1,346.35; RIL, down 2.37 per cent at Rs 1,546.55; LT, down 2.30 per cent at Rs 1,132.80; and NTPC, down 2.20 per cent at Rs 169.05.



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